Wells Fargo's mortgage business is reportedly more profitable now, with opportunities for growth as it enhances customer engagement in consumer and small business banking. The bank's Q4 2024 retail mortgage originations rose by 31 percent from the previous year, driven by higher purchase loan volume and early-quarter refinance activity. However, Wells Fargo CFO Mike Santomassimo cautioned that mortgage lending might decline due to the current interest rate environment. Despite these challenges, Wells Fargo's strategic direction and digital growth position it for potential expansion in the mortgage sector.
Key takeaways:
- Wells Fargo is making progress in resolving regulatory issues and could see its $1.95 million asset cap lifted, potentially allowing it to expand its mortgage business.
- The bank has shifted its focus away from correspondent lending to prioritize higher-margin businesses like credit cards and better serve its customers and minority communities.
- Wells Fargo has reduced its branch footprint and staffing levels but has increased its digital customer base by 19 percent since 2020, reaching 36 million customers.
- Despite a decline in overall mortgage lending, Wells Fargo's mortgage business has become more profitable, with retail mortgage originations up 31 percent in Q4 2024 compared to the previous year.